NY regulator stops Ocwen-Wells Fargo deal

ReutersFebruary 7, 2014 

New York’s top bank regulator has indefinitely halted Ocwen Financial Corp.’s purchase of the right to collect payments on a portfolio of mortgages from Wells Fargo & Co., a person familiar with the matter said on Thursday.

The New York Department of Financial Services, led by Superintendent Benjamin Lawsky, is concerned that Ocwen lacks the ability to handle the additional servicing load, the person said.

In January, Ocwen announced it was buying for an undisclosed sum the servicing rights to 184,000 Wells Fargo home loans with a total principal balance of $39 billion.

Lawsky’s office has previously taken action against Ocwen. In December 2012, the department announced that it was requiring the Atlanta-based company to install a monitor to ensure Ocwen was meeting certain mortgage servicing guidelines. Ocwen agreed to follow the mortgage-servicing rules, such as ending robo-signing and other practices, to get the regulator’s approval to purchase Goldman Sachs Group Inc.’s Litton Loan Servicing unit in September 2011.

A spokesman for Wells Fargo declined to comment. A representative for Ocwen did not immediately return a request for comment.

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